What are franking credits?
Understand franking credits and why they may appear with Australian dividends.
Summary
Franking credits can be attached to some Australian dividends to reflect tax already paid by the company. The ATO provides guidance on dividend income and franking credits.
What this means
Franking credits may affect the tax return because they can be included along with franked dividends. Investors should use dividend statements to report the correct amounts.
The effect of franking credits depends on the taxpayer’s overall tax position and eligibility.
Typical actions
- Keep dividend statements showing franked amounts and franking credits.
- Check pre-filled data carefully.
- Declare dividend income and franking credits where required.
- Seek advice if dividend statements are unclear.
Official ATO sources
Last checked: 20 June 2026
Dividends
Explains dividend income including franked dividends and franking credits.
Investment income
Explains investment income that may need to be declared.
Shares and similar investments
ATO hub for shares and similar investments.
Related questions
- How does tax work on dividends?
- What records should investors keep?
- What happens when I sell shares?
- What is taxable income?
Important notice: Tax Clarity is an independent information tool. This page provides general information based on official sources. It does not provide tax, legal, financial, or accounting advice. Tax rules can change, and how they apply depends on your circumstances. For advice about your situation, speak with a registered tax agent or qualified professional.
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